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By Kara Rowland and Sean Lengell -
The Washington Times -
Tuesday, July 12, 2011

President Obama said Tuesday that he may have to halt Social Security benefit checks in August if he and congressional leaders can’t agree to raise the government’s debt limit.

Top Republicans denounced Mr. Obama’s comments as scare tactics aimed at pressuring the GOP to blink in the high-stakes fight, and Senate Minority Leader Mitch McConnell said he no longer thinks a debt solution is possible “as long as this president is in the Oval Office.”

Seeking to shift political peril to the White House, Mr. McConnell, a Kentucky Republican, proposed a set of procedures that would allow the president to raise the debt limit without having to rely on Republican votes.

House Speaker John A. Boehner, Ohio Republican, told Fox News that negotiators are considering several backup plans as prospects for a deal diminished.

Mr. Obama warned of dire consequences should the two sides fail to reach an agreement.

“I cannot guarantee that those checks go out on Aug. 3 if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” he told CBS News.

It’s the furthest the administration has gone in signaling that it is thinking about what payments it will have to suspend if a deal isn’t reached.

Mr. Obama said the government sends about 70 million benefit checks to Social Security recipients, disabled veterans and others.

His comments drew a harsh reaction from the nation’s largest senior citizens lobby, which called on him and lawmakers to “stop the irresponsible rhetoric.”

“Now is not the time for elected leaders on either side of the aisle to play politics with Americans’ hard-earned Social Security benefits,” AARP Executive Vice President Nancy LeaMond said. “While there may be disagreement over different policies, there should be no disagreement that it would be both irresponsible and immoral to fail to make Social Security benefit payments to seniors who worked and contributed over their lives to earn their benefits.”

The group also warned against cutting Social Security and Medicare benefits to help pay the nation’s bills.

Bipartisan negotiations over the president’s “grand bargain” to slash trillions of dollars from the deficit appear to be sputtering. Lawmakers from both parties have met for three consecutive days, but instead of emerging with signs of progress they’ve drawn lines they say they can’t cross.

The Treasury Department says the government will bump against the $14.29 trillion borrowing ceiling on Aug. 2.

At that point, the government will not be able to borrow any more money and can pay out only what it generates in revenue. Given that spending exceeds revenue by about 36 percent, that means more than a third of all payments the government makes would have to be suspended.

With pessimism growing, Mr. McConnell on Tuesday introduced a “backup plan” to increase the debt limit should negotiations fail.

Mr. McConnell’s proposal is a complicated legislative maneuver that would, in effect, let the president increase the nation’s debt limit with only Democratic votes and subsequently allow Republicans to wash their hands of the politically poisonous issue.

Under the scenario laid out by Mr. McConnell, Mr. Obama would request an increase in the debt ceiling of up to $2.4 trillion in three separate submissions by next summer. The divided Congress likely would reject those requests, which the president then presumably would veto. If Congress failed to muster the two-thirds vote needed to override a veto, the debt ceiling would effectively be lifted by the amount Mr. Obama requested.

The plan would require Mr. Obama to submit spending cuts along with his borrowing requests. But unlike the increase in the debt limit, they wouldn’t automatically take effect.

“This is not my first choice,” he said. “My first choice is to get an agreement with the president to significantly reduce spending. And we’re going to continue to talk to them about that in the hopes that we can get there.”

Some conservative activists have accused Mr. McConnell of surrendering to Democrats and the president.

“If Mitch McConnell thinks caving to President Obama and allowing him to raise the debt ceiling without cuts is the way to become Senate majority leader he is sorely mistaken,” said conservative activist Brent Bozell. “The American people elected him to serve as a check on Obama’s appetite for out-of-control spending, not to write him a blank check to continue the binge.”

Even as Republicans try to force political pain for a debt limit increase onto Mr. Obama, the White House pushed back.

“The president doesn’t have a vote in this,” said White House press secretary Jay Carney. “It’s Congress that has to act.”

Mr. Carney said if the debt limit is breached, the decisions the government would have to make about payments would amount to “a Sophie’s choice situation.”

Mr. Carney said questions about the kinds of cuts possible if the debt limit is breached should be posed to the Treasury Department, but that the president was saying all programs are potentially at risk.

“We can’t guarantee, if there were a default, any specific bill will be paid,” he said, cautioning that the White House still thinks a deal will be reached.